As an investment management firm, EFGAM has an important role to play in improving shareholder value and corporate governance through our proxy voting policies. We see the proxy voting process as being extremely relevant in our engagement with companies on a range of matters and see this process as a key part of our fiduciary duties.
These guidelines are inspired by our ESG policy and are developed to ensure consistency with the ESG framework applied to our stock selection process and our funds’ portfolios.
EFGAM strives to invest in corporations that focus on long-term shareholder value creation without damaging society and the natural environment. We see corporations as complex ecosystems with an intricate net of stakeholders: shareholders, employees, communities, customers and society as a whole. Those corporations that are able to properly manage relations with these stakeholders and that can be responsive to their needs, will, we believe, deliver significant value. Those that are unable to properly manage their stakeholders can, in contrast, be expected to incur additional and substantial costs. We believe that long-term value creation will only be possible in an economically efficient and sustainable global financial system.
In this respect, we highly value transparency by companies on ESG issues. This allows investors to incorporate ESG performance into their own investment making decisions and develop a more comprehensive understanding of the overall risk profile of the companies in which they invest.
In partnership with ISS (Institutional Shareholder Services) we promote sustainable business practices including stewardship of the environment, fair labour practices, non-discrimination and the protection of human rights, according to international standards as applicable. In addition to that, our ESG Committee recently decided to adhere to the ISS new specialty proxy voting guidelines focusing on climate-related issues, moving a step forward from the previous ISS Sustainability Proxy Voting Guidelines. Consistently with the commitment to the Task Force on Climate-related Financial Disclosure (TCFD), EFGAM will now express its voting rights according to the way the investee company’s management is dealing with the risks and opportunities stemming from climate change. In practice, EFGAM may vote against directors due to failure to adequately address climate-related risks, such as poor climate-related performance or significant climate change controversies. On the other hand, shareholders proposals aiming at implementing a new climate-dedicated board committee or enhancing transparency on climate-related topics will be supported. For these reasons we developed the following Guidelines that summarise our positions on various issues of concern and indicate how we generally vote shares.